Posts Tagged ‘VC’

I’m getting sick of the bullshit

I love the start-up world. I love working with founders and young companies. I love the excitement of working on business ideas that are new and different. I love seeing the success that often comes from this hard work. I’ve never before in my professional life seen a time of such innovation and creativity. At Foundry we see more business plans now than we ever have. And what’s more, more of those business plans are really interesting (and fundable).

It goes without saying that I love the business of venture capital. I love helping entrepreneurs work on their ideas. And I love helping companies figure out how to become as successful as possible. I love the challenge of trying to figure out the next great investment and the energy that comes from working with amazing and creative people.

But I’m worried and I wanted to get it out there.

I’m worried that in all the hype, in all the “we launched our company” events, and “we changed our name again” parties, and “we redid our website – come celebrate!” shindigs, and the SXSW parties, and the hoodies, and everyone who is “killing it!”, that we’re losing sight a bit of the really hard work that is creating and building a business.

I’m worried that in offering term sheets after a single 60 minute meeting, and in pricing early stage deals like they were already late stage successes and most egregiously by constantly running around self promoting and self aggrandizing, VCs are falling prey to a cult of personality about themselves and forgetting that their jobs are to help companies be successful. And as far as I can tell, very few seem to believe what I hold as a fundamental tenet of the venture industry, which is that entrepreneurs come first, not VCs.

Don’t get me wrong. I enjoy a good party (not to mention a good hoodie!). And I recognize the reasons to celebrate important company milestones and in going to industry events like CES and SXSW. And in bringing a bunch of customers, prospects and partners together at a social event. But I feel like I’m hearing less of “did you see XYX company’s great new product” and more “are you going to so and so’s party at ad:tech:”. I’m not exaggerating when I tell you that I’ve received 30 invites to SXSW parties but not a single invite to a panel session at the conference. And when someone tells me that someone is “killing it” (a phrase I think I hear 10 times a day these days), more often than not they mean “doing the job they were hired for”.

I hear more and more stories about companies making a pitch to a VC and having an offer before they walk out of the room (entrepreneurs: do you really want to work with someone who puts so little thought into their investment process that they would do this?). And the way VCs talk about the companies they work with has clearly shifted to be substantially more VC centric (lots of use of “I” and taking credit for company success as something they themselves created rather than participated in or helped with). And, of course, much has been written about rising valuations and the potential risk this poses to particularly early stage companies. Not to mention the increasing popularity of the “party round” where many VCs participate but no one actually takes ownership (also not good for entrepreneurs, in my opinion).

And it feels like a lot of this is for external show. I’m cool; I run a shit hot start-up; I saw [insert big name technorati here] at our company party last night. I’m in such and such company with [long list of other investors] and doesn’t that make me awesome. I’m awesome I’m awesome – look at me!! And not really about building great products or great businesses.

So by all means, lets keep having fun. But let’s also remember that the goal is to build great companies. And please – my fellow venture capitalists – can we take it down a few notches and remember that our role is a supporting one. If you wanted to be the star you should have become an entrepreneur.

March 5th, 2012     Categories: Startups, Uncategorized, Venture Capital     Tags: , , ,

VCs and social media

I recently participated in a Thomson Reuters webinar entitled "Boosting Returns with Web 2.0 Technology". The seminar was targeted to VC and Private Equity professionals and focused on how investment firms can use social media in managing their investment business. 

I was reminded of the mew media technology bubble that I live in a few months ago when I spoke on a similar topic at the PEI Investor Relations and Communications Forum. When I asked the crowd of about 150 people how many were on Twitter and a single hand went up I realized that I had my work cut out for me (I might have guessed that that when I walked into the room and was the only person wearing jeans, but that’s another story)…

Because of my experience at the PEI forum (realizing that most VC/PE professionals are still just beginning to understand social media and how they might use it for promoting themselves or their firm) I focused my presentation for the Thomson Reuters webinar on the basics of social media (and reinforcing that there are a handful of firms – primarily early stage VC firms – that are active users of the technology). I highlighted how we’ve used social media at Foundry Group and specifically the benefits we’ve gotten out of being extremely public about our investment themes, our reasons for investing in specific companies, etc (see the slide that highlights the Lijit search tag cloud on our blog). The builds in the deck don’t come through SlideShare, so some of the slides are busier (or more confusing) than they were when built up correctly, but you’ll get the idea. One of my co-presenters, David Teten of Teten Advisors has a post up about the seminar as well (along with a link to his slides).

September 1st, 2009     Categories: NexGen Web, Venture Capital     Tags: ,

Are young VCs better VCs?

There’s a great post up on the NYT Bits Blog that asks “Do Young Venture Capitalists Have an Advantage?”  While established (i.e., older) venture capitalists have more name recognition and therefore theoretically access to better deal flow, younger VCs are closer to the technology and have more in common with today’s set of technology entrepreneurs – according to the article – which makes them have an advantage in today’s venture market.

This is a great question and one that I think about a lot as I consider ways to be a better venture capitalist myself. In fact, one of the reasons I started this blog was to shed light on the progress of an individual VC as I rose in the business. As part of this I try to think introspectively about what makes a great venture capitalist and how one hones these skills. Seeing the post on the NYT blog seems like a great opportunity to dive into this question again. And the Times has it wrong in my view – they are playing off of a stereotype which may have some general applicability but misplaces the attribute.

Age is not the defining attribute of a good (or bad) venture capitalist – it’s drive. And while there’s some correlation between being a younger VC (which in our business at the partner level is generally late-30’s through mid-40’s) it’s just not the differentiator. In my view all great VCs have drive. And while having drive won’t make you a great VC, not having it will almost certainly leave you behind. I think the Times is mistaking age for this hunger to work, learn and stay current on technology that characterizes the drive of great VCs. It’s true that many people who have been in the venture business for a while lack this drive and it’s also true that many younger VCs that I know have an incredible desire to work hard and succeed but there are plenty of “experienced” VCs that have been at it for 15 years that still wake up every morning charged up for their day and spend their weeks crisscrossing the country in search of new ideas (my partner Brad comes to mind – he’s by no means “older” at only 43, but he has been in the VC business for a long time and without question has no lack of drive or work ethic). 

I may be over-generalizing but in my world view there are Old School VCs and New School VCs.  Old School VCs are partners/firms that prefer to sit back in their offices, have entrepreneurs come to them, invest only in their back yard and show up at monthly board meetings to offer their wisdom. New School VCs are out in the technology community, seek out new trends and companies, engage with the tech ecosystem (both start-ups and more established companies), invest where their investment focus takes them, aren’t afraid to travel and generally work significantly harder than the stereotype of a venture capitalist. The former aren’t necessarily old, they’re just old school. Likewise the latter aren’t necessarily young, they just aren’t resting on their laurels (or don’t have them yet).

When I think about what we’re trying to accomplish at Foundry Group (and what my friends at similar firms like USV, Spark, True, HW12, etc.) are trying to accomplish I don’t define our style of investing and managing our firm based of our ages. I think about how much my partners and I enjoy our work, how much we care about being successful and how hard we’re willing to work to be so. That drive is not a trait of a young or old venture capitalist – that the trait of successful venture capitalists.

June 10th, 2009     Categories: VC Bloggers, Venture Capital     Tags: , , ,